Monster Beverage (MNST) Gains 3% on Red Bull Price Increase and Into Annual Meeting
By Investing.com Staff.
Today’s gains in Monster Beverage (NASDAQ:) come ahead of today’s annual meeting and as rival Red Bull raised prices again for September.
RBC Capital analyst Nik Modi notes: “We just confirmed with our trade contacts that Red Bull has communicated a price increase to its trade partners of ~7%. The price increase is set to go in effect in September.”
Modi sees this as good news for Monster, although the company has not directly commented on the price increase.
He reiterated an Outperform rating and $100 price target for Monster.
RBC was not the only firm positive on Monster on Tuesday.
Credit Suisse analyst Kaumil Gajrawala reiterated an Outperform rating and $111 price target on Monster ahead of its shareholder meeting.
Gajrawala said the Red Bull price hikes should make Monster management more comfortable about their pricing decision for this fall. Further, he expects more innovation than in the past and notes Nielsen data should grow faster than high-single-digit growth in the US during the back-half, as retailers load in ahead of price increases. He added that while currency will take a couple of pennies out of EPS, a larger buyback will likely be proposed given the large cash balance on the sheet.
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